Victoria's Secret
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Victorias Secret is bringing sexy back. Super lame line but sometimes the silly laughs are needed medicine especially with the state of the world we’re in now.
This is the highlight of this weeks post and LongVol Podcast but we have a few other things to get into as well.
- Netflix Earnings a few thoughts
- Housing Stock Update & Charts
- Victoria’s Secret – A New Long?
Netflix Earnings
The stock is up handsomely post-earnings today with some key changes made.
- Price hikes coming again for premium and standard
- Saw a gain in subscribers due to crackdown on password sharing from Q2 so we see that now with Q3
- That’s an inflection to watch: the increase in subscribers so I want to see if that trend continues and this now has my attention for bullish flow in the coming quarter
Housing Stocks Update
The data just keeps getting worse, as expected, and this should be the start of things breaking down in my view. I have been short a basket of housing stocks & home builder related items to express the idea.
- Weakest data since 2010
- Down 15.4 over the last year
- Supply is still limited on ‘old product’ not new product
- Change in overall thesis due to constrained consumer
For buyers my thought process is not universal to each person. We are short specific names in the public equity markets but I do believe there is an issue in old-product as well.
- Rent v. Buy Debate – invest in companies and build wealth
- Duplexes (one person on my team just did this – smart move)
Victoria's Secret - A New Inflection?
This new long caught my attention recently to begin tracking. If you follow the framework I believe in most of it involves making the list of ideas to track smaller, not bigger.
In an interview with The Business of Fashion, Victoria’s Secret said its recent initiatives to promote inclusivity and get rid of some of its most popular supermodels attracted “favorable reviews from online critics [but] never translated into sales.”
- Shares down -45% YTD
- They are going back to their old model after trying for two years to appease “wokeness”
- Cost cutting & going back to what worked
- Q3 outlook improved losses decreasing (bad news is good news)
- This gets my attention
Final Word.
- Earnings season is here so it’s very critical for the market to sustain these price levels that we see.
- I have some new value names that have made my list that I’ll be publishing in the report.
- The first AST Idea was closed this week. A net win on Dollar General, close to a double with the DITM calls.
Thanks fore reading.
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About the Author
Daniel Bustamante is the founder, managing partner, and CIO of Bustamante Capital L.L.C., a multi-strategy hedge fund management firm based in San Juan, Puerto Rico. He has over 10 years of experience in the financial industry, specializing in equities, futures, and event-driven trading strategies.
He is also the founder of TheLongVol.com, a blog and newsletter that shares his insights on his investing process, travel, and other private investments. He has been featured in Bloomberg, Arizona Business Journal, Business Insider, Yahoo! Finance, Forbes, Seeking Alpha, and other publications over his career on Wall Street.
